Primary sclerosing cholangitis and primary-biliary cirrhosis are important causes of chronic liver disease in adults. Both of these diseases are progressive and may require orthotopic liver transplantation for the management of the end stages. There is no effective therapy for primary sclerosing cholangitis. Ursodeoxycholic acid has demonstrated clearcut clinical benefit in some patients with primary biliary cirrhosis, but unfortunately, a substantial number of patients with primary biliary cirrhosis appear to have a suboptimal response to ursodeoxycholic acid. Because of this, a need exists for additional forms of therapy in both groups of patients, identification of such therapy is our long-term goal. Corticosteriods may be of value in these patients, and limited information supports the use of corticosteroids in these groups of patients. Concerns about cholestasis-associated osteoporosis have made clinicians quite cautious about the use of conventional corticosteroids for these patients. Recently,, budesonide, a new corticosteroid with extensive first pass hepatic metabolism and presumably minimal systemic side effects has become available. This drug, in theory, could provide the potential benefits of conventional corticosteroids without the associated side effects. This pilot study will assess the safety and efficacy of budesonide in patients with primary sclerosing cholangitis as well as primary billiary cirrhosis patients with suboptimal biochemical response to ursodeoxychoic acid. This will allow us to estimate the efficacy and assess the safety of budesonide during this study as we closely monitor the effects of budesonide during this study as we closely monitor the effects of budesonide of cholestestatis-associated osteoporosis. A simple two-stage design will be used with a minimum of 30 patients and a maximum of 50 patients entered (15 or 25 patients with primary sclerosing cholangitis and 15 or 25 patients with primary billary cirrhosis). The trial will be conducted over a two-to three-year period, depending on the results of the first stage. If the drug looks promising and is well tolerated, a randomized trial will be planned.